Thanks to the increased use of coal associated with industrial production, shifting weather patterns and greater use of coal-fired boilers that marks the onset of winter, a toxic cloud of smog more than 3,000 kilometres long currently stretches across north and central China, blanketing more than 70 cities and affecting hundreds of millions of people.
In some areas in and around Beijing, where severe air pollution has been a problem for many years, daytime visibility has been reduced to less than 200 metres. Last Friday at 3pm, in the northern industrial city of Daqing, a place associated with the oil and gas industries, the air quality index (AQI) rocketed to what some commentators are describing as a freak AQI reading of 999.
A system devised by the US Environmental Protection Agency, AQI measures levels of atmospheric particulates, ground-level ozone, sulphur dioxide, carbon monoxide and nitrogen dioxide against a scale on which levels of more than 100 are deemed a potential health hazard.
Last month, the Chinese capital was placed on a red alert when a five-day-long smog caused the city’s AQI to reach 400. The situation was deemed so serious that from December 16 the use of cars was restricted, businesses and schools were temporarily closed and Beijing’s 22 million inhabitants were encouraged not to venture outside unless it was absolutely necessary.
The situation returned to normal only the following week, when winds cleared the skies above the city, a change witnessed by Frank van Mierlo, founder and chief executive of 1366 Technologies.
“The last week has been horrendous,” the engineer said from his Beijing hotel room. “It would not be difficult to pump hydro facilities in the mountains surrounding Beijing and to cover the south sides of the mountains in solar panels.
“The solar panels could soak up the solar energy during the day, pumping water uphill, and during the night or on a rainy day the water could supply the city with power. You could supply the whole city with clean energy.”
When it comes to solar energy, the entrepreneur admits to rather more than a vested interest. The 1366 in 1366 Technologies refers to the amount of the Sun’s energy that hits each square metre of the Earth’s atmosphere, an appropriate reference given Mr van Mierlo’s goal.
In 2008, he established 1366 Technologies with a team of engineers from the Massachusetts Institute of Technology (MIT) and the Rensselaer Polytechnic Institute (RPI) with the specific aim of making solar energy cheaper than coal.
Eight years later, 1366 Technologies claim to have achieved just that by developing a new technique for manufacturing silicon wafers, the part of a photovoltaic cell that converts sunlight into energy, which not only uses a third of the energy expended in traditional silicon wafer production but does so for half the cost and with dramatically less waste.
1366 do this by employing a technique they describe as Direct Wafer Technology. Rather than sawing the wafers from cast silicon ingots, the traditional fabrication method that wastes nearly half of the raw material, creating a silicon dust known as kerf, the technology creates wafers from molten silicon, pouring them at a rate of one every 20 seconds.
It is an achievement that has earned 1366 Technologies a place on the shortlist for the small and medium-enterprise (SME) category of the 2017 Zayed Future Energy Prize, which will be announced and awarded during Abu Dhabi Sustainability Week next Monday.
1366 Technologies feature alongside 24M, a Cambridge, Massachusetts-based start-up working on advanced lithium-ion batteries, and Sonnen, the European market leader for residential energy storage systems. Both 24M and Sonnen were recently listed among the top 50 smartest companies last year, according to MIT Technology Review.
As well as being potential winners of the US$1.5 million (Dh5.5m) Zayed Future Energy Prize, each of the shortlisted finalists has the potential to benefit from the best of times, worst of times scenario that currently faces the renewable energy sector.
Last month, just as Beijing was being smothered by its record-breaking smog, the renewables research organisation Bloomberg New Energy Finance (BNEF) released the report Climatescope. It showed that unsubsidised solar projects were starting to become more cost-effective than coal and natural gas – prices for solar contracts have reduced by 63 per cent over the past five years and now stand at 3 US cents per kilowatt-hour – and that more capacity for clean energy is now being installed each year than for coal and natural gas combined.
“Solar investment has gone from nothing – literally nothing – like five years ago to quite a lot,” Ethan Zindler, head of US policy analysis at BNEF, told Bloomberg Technology’s Tom Randall last month. “A huge part of this story is China, which has been rapidly deploying solar and helping other countries finance their own projects.”
Despite the uncertainty over the short-term future for renewable energy in the US – president-elect Donald Trump recently criticised regulations that forced businesses to address climate change and promised, during his campaign, to “end the war on coal and the war on miners” – the Chinese government doubled down on its commitment to renewable energy last week when it announced plans to create 13 million new green jobs.
The move has been seen not just as a short-term response to the crippling urban air-pollution crisis that China is currently facing but also as a longer-term attempt to refocus the Chinese economy away from traditional, energy-intensive sectors such as steel and cement towards low-carbon innovation in the renewable energy sector.
The need to develop smart energy storage solutions goes hand-in-hand with the increase in renewable power generation, a challenge that has been taken up by the battery maker Sonnen, one of the fastest-growing technology companies in Germany and one of the competitors for this year’s Zayed Future Energy Prize.
“At the end of the day, the production cost for renewable energy per kilowatt hour is very competitive and you will eventually have thousands of renewable energy plants that have been written off but which are still working and this will reduce the cost of energy to virtually zero,” explains Sonnen’s co-founder and chief executive, Christopher Ostermann.
“On the other hand, renewable-energy generation is volatile. You never know when the wind will blow or the Sun will shine, so you need storage in order to manage that volatility and this is why storage is one of the key technologies for the energy transition to renewable energy.”
Having sold more than 15,000 lithium ion storage batteries to homes and businesses in Germany, Sonnen is now starting to install its batteries throughout Europe as well as in Australia and the US, where its main competitor in the developing home energy storage market for solar-equipped homes is Elon Musk’s Tesla.
The US and European markets for energy storage are, however, quite different.
“In Germany, the use of Sonnen’s residential storage systems is primarily about self-consumption to avoid buying power from the grid. This makes economic sense because the retail power price is 30 cents pkwh and the solar feed-in tariff is 11 cents pkwh,” Mr Ostermann said.
“In the US there is a very strong market for backup power. People are interested in resilience, especially on the East Coast, because with all the storms they have there people can be without power for days or weeks.
“But because of noise and emissions, diesel generators are not allowed any more in many residential areas, which means that power is looking for alternatives and solar plus storage is definitely one of those.”
The real story behind Sonnen, however, is not the firm’s battery technology nor its international expansion but the disruptive impact the company is starting to have on energy markets. This is thanks to its own transformation from being a manufacturer of renewable technology to becoming an energy generator and supplier.
Sonnen have achieved this at home because of Germany’s liberalised energy market, which allows the company, once it has the necessary permissions and has paid the necessary fees, to act as a utility provider.
“This is not a matter of electrons, it has nothing to do with physics, but is rather a matter of economics and a matter of balance,” Mr Ostermann explains.
“We connect all of the users of our storage systems, creating a virtual power plant that not only supplies them with electric power when they need it but also allows us to buy their excess electricity back from them in real time to sell this back to the grid.”
For the scheme to work, Sonnen requires at least 20MW of power, the equivalent of 2,000 interconnected Sonnen battery units, something the company has achieved only in Germany, Italy and Switzerland so far.
The upside for transmission system operators, the companies charged with transporting energy across the grid at a regional or national level, is that Sonnen is able to help them in regulating their energy supply. For customers who agree to take part in the programme, sonnenCommunity, the incentive comes from electricity that is bill-free.
“If one of our customers agrees to take part in this programme they will never get an electricity bill again from the utility or from us,” Mr Ostermann said.
“We need only 5 per cent of the storage capacity to deploy this. We get €500 (Dh1,935) to €550 a year for each customer, and in return for the customer allowing us to use their storage system, we give them value back in terms of electric power.”
In September, Sonnen started providing this blend of energy supply, storage and management – along with free electricity to 2,000 German customers – creating a new business model for itself in the process.
Whether these examples of innovation are enough to secure 1366 Technologies, 24M or Sonnen the SME award for the Zayed Future Energy Prize is yet to be seen. What is certain is that the future for such companies in the dynamic renewable energy market will depend on their ability to navigate the disruption their technologies promise to unleash.
nleech@thenational.ae